Many corporations made modifications to outlive the pandemic. For tech corporations, the modifications have been additionally about seizing alternatives to thrive as life abruptly moved on-line. Few corporations have juggled these dangers and rewards in as many industries, throughout as many international locations, as Prosus, an Amsterdam-based conglomerate that in 2019 was spun out of Naspers, the South African tech and media large.
Prosus’ holdings run from e-commerce and classifieds to meals supply, fintech and extra. The group is valued at round $180 billion, which makes it one in every of continental Europe’s 10 largest corporations. It operates in additional than 80 international locations and owns sizable stakes within the web giants Tencent of China and Mail.ru of Russia. The businesses that Prosus controls make use of round 20,000 folks, and lots of extra work as contractors or at corporations through which Prosus holds smaller stakes.
That breadth offers Bob van Dijk, chief government of Prosus, a singular vantage level from which to evaluate the tech trade’s fortunes, significantly in rising markets like Brazil, Russia, India and China. Will pandemic habits persist? Can regulators rein in Huge Tech? Have the markets gotten forward of themselves? Van Dijk sat down for a digital interview to evaluate the tech world’s prospects within the years forward.
Some pandemic pivots will stick
Prosus has fared comparatively effectively through the pandemic. Within the six months to September, the newest outcomes out there, its income and revenue rose round 30%. Its stake in Tencent alone added almost $3 billion to its backside line over that point.
When the pandemic hit, the downturn wasn’t felt evenly throughout the group’s portfolio. The upturn has equally mirrored how authorities stimulus, entry to vaccines, mutations within the coronavirus, and a number of different components have assorted from nation to nation.
The toughest-hit markets the place Prosus operates stay Latin America and South Africa, whereas Europe and North America suffered preliminary hits to their economies adopted by spurts of restoration. Asia has largely bounced again.
The pandemic lockdowns modified shopper behaviour, forcing Prosus to adapt in ways in which van Dijk believes can be everlasting.
“We don’t have any cause to imagine they may go away,” he stated, including that the pandemic primarily “introduced the longer term ahead by a number of years.”
Briefly, meaning higher automation and fewer human contact.
“In our e-commerce enterprise, we already had drop-off lockers,” van Dijk stated. “That’s turn out to be very, very prevalent. We figured that folks prefer it. It’s no-contact supply.”
Spurred by necessity, Prosus’ portfolio corporations discovered different methods to wring efficiencies.
“We discovered that extra of our enterprise could be automated than we thought,” he stated. “That was pushing us additional down the curve of constructing a really easy buyer expertise that has as few contact factors as potential.”
For instance, its classifieds enterprise, OLX, started asking clients to examine the automobiles on the market themselves, lowering social contact.
“When compelled, you possibly can suppose creatively,” van Dijk stated.
Meals supply, unsurprisingly, has been as sturdy a enterprise for Prosus throughout lockdowns because it has been for Uber, DoorDash and others. However Prosus corporations like Supply Hero and iFood took steps to assist protect long-term goodwill with its companions on the expense of short-term earnings.
In Brazil, for instance, “we paid eating places a lot faster than we normally did,” van Dijk stated. “From a cash-flow perspective, that was really fairly vital” in conserving eating places of their good graces, lowering potential tensions between eating places struggling through the pandemic and on-line supply apps seeing demand soar.
It was an identical story in India for classifieds. “We lowered charges considerably, or we waived charges,” he stated. “That allowed folks to protect money. When issues began to return again once more, there was numerous appreciation round that.”
A world of more durable tech regulation awaits
Although Prosus is rising from the pandemic able of power, van Dijk stated the corporate wouldn’t be capable of escape a worldwide push by governments to constrain the facility of tech giants in antitrust, labor and different areas.
He’s not essentially combating the brand new wave of regulation, and provided a historic analogy: “When the primary automobiles have been on the earth, there have been no guidelines by any means. When there have been extra automobiles, that was not wonderful.” Advances in know-how will naturally require the regulation to catch up, he stated, calling the development towards stricter regulation “a smart transfer.”
One main concern amongst tech giants is the rollout of so-called digital companies taxes all through Europe, meant to gather extra income from multinational corporations that do intensive enterprise in international locations with out a lot of a bodily presence inside their borders. These wouldn’t apply to Prosus, van Dijk stated — “we make investments domestically and pay taxes” — however he added that the costs may erode the trade’s revenue margins.
“I perceive the place it comes from,” he stated, however “generally the regulation is just a little blunt.”
What may damage Prosus, van Dijk stated, are modifications to the gig economic system, significantly efforts to entitle supply drivers to employee advantages. Some drivers want the pliability of being contractors, he stated, and “we attempt to pay folks correctly no matter what the laws is.” So far as he may recall, Prosus has by no means lobbied in opposition to classifying staff as workers, as rivals like Uber have.
One other space to observe is China, which has moved to rein in a few of its homegrown web behemoths. Although officers have targeted largely on Alibaba, Tencent hasn’t escaped their gaze: The corporate, which Prosus purchased into again in 2001, was amongst these fined final month for violating antitrust guidelines. It’s Prosus’ single largest funding, and a more durable crackdown may batter the conglomerate’s market worth.
Regardless of the stakes, van Dijk downplayed the menace. “Our impression is that China continues to be very supportive of its tech giants,” he stated.
Markets don’t all the time go up
The big monetary rescue plans enacted by many governments to fight the pandemic unleashed a torrent of cash into the worldwide financial system. A lot of that cash made its method into the tech sector.
“Market valuations for know-how have turn out to be fairly full,” van Dijk stated. “There’s some huge cash on the lookout for a return.”
Final summer season, Prosus was outbid for eBay’s classifieds enterprise, which went to Adevinta of Norway for $9.2 billion. That defeat adopted a dropping effort to amass the restaurant supply firm Simply Eat, which Takeaway.com purchased for $7.8 billion.
Maybe surprisingly, van Dijk stated Prosus hadn’t encountered a lot competitors from particular goal acquisition corporations, or SPACs, which have raised almost $100 billion this yr and are very lively acquirers of tech corporations. This can be partly as a result of SPACs are largely a U.S. phenomenon, though different international locations have been attempting to court docket the blank-check companies.
Van Dijk stated Prosus would possibly ultimately discover itself competing with SPACs, significantly for later-stage non-public corporations. Within the meantime, Prosus itself invested $500 million in a SPAC final yr when the shell firm merged with Skillsoft, an schooling know-how agency.
Currently, Prosus has largely been investing in its present companies.
“Placing cash into there’s nonetheless a good suggestion,” van Dijk stated. And some months in the past the corporate introduced that it will purchase again $5 billion of its shares.
Issues are wanting barely extra measured lately, van Dijk stated, with valuations coming down “to rather more sustainable ranges.” For a serial dealmaker, meaning alternative: “It’s simpler to do acquisitions in a market that’s cooling off.”